Business Formation in Miami, Florida
The legal structure you choose during the process of business formation in Florida or expanding an existing business, determines your daily operations, the ability to raise capital in Florida and beyond state lines, the amount you pay in taxes and to what extent your personal assets are protected from business creditors.
The most common business entities in the State of Florida are:
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A sole proprietorship is the simplest structure used to start a business in Florida. All you have to do as business owner is to begin conducting business activities and you are automatically considered a sole proprietorship. In Florida, as business owner of a sole proprietorship you are not required to register the business with the State of Florida as long as you conduct activities under your legal name.
However, if as business owner you operate the business under a different name than your legal name, you must register the business with the State of Florida. Sole proprietorships are easy to form, do not require formalities, do not produce a separate business entity distinct from the owner and gives the owner complete control of the business.
In Florida, general partnerships (GP) can be formed with a handshake. A partnership is an association of two or more persons known as partners who engage in a business for profit as co-owners. In simple words, you as a business owner and form a general partnership by conducting a business for profit with at least one more person.
Without going into details is important to point out that a joint venture is a type of general partnership. General partnerships are informal, easy to form, do not require any formalities or written agreements and are not required to register with the State of Florida.
However, because general partnerships are informal and involve two or more people going into business together, we recommend executing a written partnership agreement and registering with the State of Florida. While the registration and partnership agreement are optional, we recommend them in order to avoid and discourage potential conflicts and litigation with your business partners.
Another type of partnership in Florida is the limited partnership (LP). The limited partnership is more complex and require a series of formalities and registration with the State of Florida. A Limited partnership must have at least one general partner and one limited partner. The general partner manages the business and is personally liable for the limited partnership’s debts and claims. On the other hand, the limited partner is typically a passive investor who contributes capital to the limited partnership, is not involved in management and is not personally liable for the company’s debts and claims.
In Florida, limited liability companies (LLCs) must be registered with the State for a business to become an LLC. Similarly, limited liability companies organized in another U.S. state or foreign country must register in the State of Florida in order to transact or conduct business in this state. To form a limited liability company, you must submit the Articles of Organization together with the required fees to the State of Florida. In addition, Florida law provides for the existence of an Operating Agreement. The Operating Agreement is recommended in order to prevent disputes about profits, distributions and direction of the firm.
In Florida, business owners interested to start a corporation must comply with state law formalities and fees. A corporation must be registered with the State of Florida for a business to become a corporation. Similarly, a corporation formed in another U.S. state or in a foreign country must register in the State of Florida in order to transact business or start and conduct its affairs in this state. To that extent, to form a corporation you must submit the Articles of Incorporation together with the required fees to the State of Florida. In addition to the Articles of Incorporation, Florida law provides for the existence of Bylaws. The Bylaws are the governing constitution of the corporation and define the structure and rules of operating a corporation in Florida.
Contact us, your business formation lawyer in Miami, Florida to determine what legal structure is right for you and assist you with registering and executing the right agreements for your business.
Malescu Law P.A. – Business & Corporate Lawyers